Biden’s Budget – Plan to Cut U.S. Deficit
In a bid to decrease the growing U.S. deficit, President Biden released a proposed budget on Thursday morning, sparking both approval and concern from both sides of the political spectrum. The proposition of the budget states a decrease of $3 trillion from the deficit in under 10 years. This does, however, come at a large cost in the form of a 25% minimum tax for the uber-wealthy. It also raises corporate taxes from 21% to 28%, with larger increases in the oil and gas industry. With the larger gains in federal revenues from these higher taxes, there would be new driving factors to decrease the federal deficit, which was at $1.38 trillion for 2022. In the end, Biden’s proposed budget will be a strong pillar towards his upcoming 2024 re-election campaign; however, the offer must first turn to Congress as they have final say into whether the budget is set in legislation or denied.
Despite the Biden’s new plan, there still remains immediate issues needed to be resolved within the House of Representatives. On the topic of the U.S. debt ceiling, a standoff between House Democrats and Republicans persists, with little productive movement from either side of the coin. Currently, the deadline to raise the deficit is set for mid-August, which if not raised, will lead to the U.S. defaulting on its debt.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.